In Response to Rising Concerns

FanDuel, a major online betting company in the U.S., is prohibiting the use of credit cards to fund accounts, including its sportsbook, casino, and racing segments. This move follows increased pressure from the industry and regulatory scrutiny, as well as calls from Senator Elizabeth Warren for the company to cease accepting credit card payments.

Warren highlighted that nearly one in four American bettors uses credit cards to fund their gambling activities, often leading to substantial fees that can exceed half of their original wagers. Competitors like DraftKings also cited these high fees as a reason they no longer accept credit card payments.

Achieving Cost Efficiency and Responsible Gaming

According to Jordan Hirschfield from Javelin Strategy & Research, this new policy benefits both FanDuel and its customers. By eliminating per-transaction costs, the company can encourage responsible gambling while also offering better rates for new deposits through stored-value accounts.

Hirschfield noted that such accounts are increasingly seen as digital gift cards suitable for self-use, a trend that has reshaped the prepaid industry beyond just gift cards.

The Rise of Digital Gaming and Gambling

The rise in stored-value accounts aligns with broader trends in the prepaid market. With online betting now legal in 32 U.S. states, the expansion is expected to slow as the sector matures. However, the ban on credit card payments could keep digital gaming and gambling a prominent segment within prepaid products.

Eight states have already prohibited credit card funding for betting platforms, with more likely to follow suit. Despite this trend, stored-value accounts remain a key feature in loyalty programs and incentives tied to specific betting behaviors.